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SUGGESTIONS 



UPON THE 



SALE OF PATENTS 




Copyright 1894 

By 

W. E. MILLS 



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PART I. 



COMMERCIAL POINTS. 

A PATENT RARELY SELLS ITSELF. — OllCe in 

a great while some person hunts up the owner 
of a patent and buys it but such instances 
are very rare, so rare as not to be worth tak- 
ing into account as a reasonable basis of 
making a sale. It is an observation of un- 
doubted soundness that, as a rule, a patent for 
even a meritorious invention is without mon- 
ey value unless it be supplemented by energy, 
perseverance and business tact. It is like a 
gold mine unworked. 

A patent is, in one sense, merely a negation. 
It simply p^revents people in general from 
doing something. It simply prevents the mul- 
titude from making, using and selling the pat- 
ented improvement. It is a very rare thing for 
a patent owner to realize anything simply from 
that prevention ; it sometimes happens that a 
patent is infringed for a term of years unknown 
to both patent owner and infringer, while the 
patent remains unworked by the owner ; that 
the infringement is finally discovered ; and that 
thereupon the patent owner becomes entitled 



4 SUGGESTIONS ON THE 

to a substantial recovery of money from the 
infringer ; this, too, is so rare as not to be 
worth taking into rational account as a mode 
of making a patent valuable. The chances 
are more than a hundred to one that no one, 
aside from the patentee, will ever desire to 
practice a patented improvement until he 
either first sees the patent owner making mon- 
ey out of it or until, in some other way, he is 
convinced that be can make money out of it 
himself. A large part of the patentee's battle 
remains to be fought after he has secured his 
grant of exclusive right from the Patent Ofifice. 
Only meritorious inventions sell. — 
The foregoing remarks have been made wiih 
reference to really meritorious inventions, those 
which well and economically fill a real want 
and which only need to become well known in 
order to become established in public favor. 
Not all patented inventions are of this kind ; 
some of them embody enough of originality to 
warrant the issue of patent therefor but they 
are not practical, they will not work easily and 
successfully for the purposes for which they 
are designed, they are not cheaper, handier or 
in some way more efficient than, or superior to, 
theretofore existing devices and tlrerefore they 



SALE OF PATENTS. 5 

are devoid of money value. Successful inven- 
tions must appeal to a market of some con- 
siderable extent, not necessarily a large mar- 
ket in any one locality but the market, in the 
aggregate, must be of good size. The most 
ingenious of all possible devices for plucking 
the blossoms of century plants would not 
attract investors. And if a patentee discovers 
that his invention will not work successfully, 
in ordinary and unskilled hands, or that the 
market contains some other thing just as good, 
and cheaper to boot, the moment has come 
for him to abandon the project of selling his 
invention in its then shape. It may contain 
the germ which by further study and improve- 
ment will dominate the market ; it can not, In 
reason, be sold until it will. 

Patent brokers. — Before a patentee has 
long held his patent, he will be sure to re- 
ceive communications from parties professing 
to make a business of selling patents and some 
of the communications will read very much as 
if the senders were quite anxious to buy the 
particular patent of him to whom the com- 
munication was sent, and as if the senders only 
awaited the naming of a price for the inven- 
tion, to send on the money and close the trans- 



6 SUGGESTIONS ON THE 

action. If the patent owner follows up these 
pleasing suggestions, he is sure to find that the 
payment of a fee, for some plausible purpose 
or other — such, for instance, as a search into 
the validity of the patent — is a necessary step 
in the negotiations ; and if the patentee takes 
that step then the proceedings come practi- 
cally to an end unless indeed, the patent owner 
loses a model or machine which he sends the 
" broker." 

In an acquaintance of more than a quarter 
of a century with the doings of thousands of 
inventors, the writer has never known a patent 
to be sold through a patent broker. Let them 
entirely alone unless they will undertake to sell 
your patent without any preliminary fee for 
any purpose whatever.. And send them no 
model or machine that it will hurt you to lose. 

Demonstrate and develope before sell- 
ing. — An invention drawn and described on 
paper and the same invention made and sold 
at a profit are two things which -have a very 
different money value to the average man of 
business — even if he be engaged in the trade 
or occupation to which the improvement ap- 
pertains. The invention on paper may some- 
times be sold to some man thirsting to find a 



SALE OF PATENTS. 7 

short road to riches but rarely can it be sold 
in that shape to any man whose means have 
come to him in the hard school of experience. 
This is true even of the man whose occupa- 
tion makes him thoroughly conversant with 
the business to which the improvement be- 
longs ; he suspects some weakness in it ; he 
must see it work ; he must know to a cer- 
tainty just what it costs to make it by known 
and certain modes of manufacture ; above all 
he desires to know how it will strike the peo- 
ple who purchase and consume such things. 
The touchstone of value, for a new thing, is 
the purchasing opinion of that part of the pub- 
lic which has use for it. The purchasing 
opinion of the public is apparently — though 
probably not really — an uncertain and fickle 
thing. A new device may command the quick 
admiration of men by its novelty and ingenuity 
but, if after trying it, they go back to the old 
thing, good-bye to the invention, at least in its 
then form. 

On the other hand one may fail to awaken 
general interest in his invention, be it never so 
well described and illustrated on paper, but let 
its practical and profitable manufacture be 
established, even on a small scale, and the 



8 SUGGESTIONS ON THE 

same persons whose interest could not be 
aroused at first will stand by ready and anxious 
to invest. Such is human nature and it cannot 
be blinked. 

It follows that, if the thing be practicable, 
the beginning of the practical manufacture 
and sale of a patented improvement is a long 
step toward sale of the patent at a respectable 
figure. It follows, further, that a patent owner 
should most seriously consider the question 
whether he can accomplish it. 

Has the patent owner the money and the 
time to do it ? Sometimes the nature of the 
invention is such as to practically forbid it ; if, 
for instance, the patent be for an improvement 
in railroad bridges, steam dredges or light- 
houses, no ordinary inventor is apt to be able 
to do more than build a good model. If the 
improvement be a new steam engine, the or- 
dinary inventor will hardly be able to do more 
than to build a small one or possibly a working 
model. In articles of the cost-grade of plows, 
hay cutters, looms of the simpler sorts and fen- 
ces, an inventor may be able to go far enough 
to produce a few machines or specimens and 
be prepared to take orders to be filled after the 
orders are received. In machines and processes 



SALE OF PATENTS. 9 

for producing small, standard articles of trade 
such, for instance, as pins, hooks and eyes, 
matches and shoe-pegs, the making and work- 
ing of a single machine may fill all the needs 
of the situation. But in small inventions, 
themselves new, such for instance, as small 
hardware, jewelry, household utensils and 
stationery, the case will oftener arise when 
the ordinary patent owner can see his way to 
establish the practical manufacture and sale 
of his improvement on a small scale. If an 
inventor has not the means and the time to 
go so far as thus indicated, it is often possible 
to procure a partner who has, he being in- 
duced to take hold by having secured to him 
a share in the proceeds of ultimate sale. But 
no poor inventor should sacrifice his ordinary 
occupation or the support of his family for any 
such purpose for the outcome is too uncertain 
to warrant it. Be contented to go slowly if 
you must, but persevere. 

Getting to the point of actual manufacture 
and sale involves steps of great practical im- 
portance. The inventor is thereby forced to 
practically perfect his article in all its details 
and to accurately ascertain just what its cost 
is. Mere theories cannot be relied upon in 



lO SUGGESTIONS ON THE 

these respects. Let the inventor be not dis- 
couraged if he can not, to begin with, reduce 
the first cost so as to compete with other ar- 
ticles already in the market. He may be 
forced to make a number of minor inventions 
on the way to that end. But never mind ; 
ninety-nine times out of a hundred the thing 
can be done by the exercise of sufficient per- 
severance. Neither let the inventor be dis- 
couraged if the first half dozen of manufactu- 
rers to whom he applies to make certain parts 
give prices which can not possibly be afforded. 
It may even become necessary to procure 
quite a list of manufacturers before one is 
found who readily adapts himself to the sit- 
uation. Manufacturers do not take kindly to 
making new things and. their workmen gener- 
ally understand only the routine tliey have been 
taught. It is not rarely a part of an inventor's 
task to teach such workmen in their own bus- 
iness ; to that end he needs to study the 
business till he thoroughly understands it, and 
having compassed that, he often needs to 
change the form and shape of his invention 
in ceitain details until it lends itself to pro- 
duction by well known methods and at the 
cheapest possible cost. If after an inventor 



SALE OF PATENTS. II 

has taken his patent he then learns for the 
first time what the difference between the first 
cost and the retail selling price is, as to most 
articles of manufacture, he is likely to be sur- 
prised — a ten cent article sometimes costing 
no more than a cent — but he must accept the 
situation and conform to it. 

The inventor who produces a genuine im- 
provement and who is also able to sell it 
cheaper than the thing already in the mar- 
ket, with which it competes, has a "sure thing." 
He should make that the goal of his ambition 
in this regard and study every difificulty he 
meets on the way until he surmounts it. 

In the case of large or costly structures, 
where from the nature of the improvement, the 
inventor can not enter upon even the begin- 
ning of its practical manufacture, it is yet 
practicable and desirable to obtain the ut- 
most simplicity and cheapness, and to ascer- 
tain how and by whom it can be made and at 
what cost. And alongside of this it is de- 
sirable to ascertain the first cost and the 
selling price of the things already in the mar- 
ket with which the new invention must com- 
pete. 

If an inventor is going to put his device 



12 SUGGESTIONS ON THE 

upon the market at all he should not sell the 
first specimen until he has made it as hand- 
some and tasty as in him lies. Let the im- 
provement be not offered for sale until it is 
perfected. If a new device fails to please its 
purchaser by reason of some minor defect he 
thereby acquires a predjudice against it which 
is afterwards overcome with difficulty when 
again presented to him with the defect cured. 
And nature has so implanted the love of beau- 
ty in all minds that pleasing form and finish, 
in an article of manufacture, are distinct at- 
tractions to purchasers aside from the question 
of utility. Combine beauty with cheapness if 
it can be done. Let an inventor be prepared 
to offer to a purchaser of liis patent an im- 
provement all ready for the market, in efficien- 
cy, form and finish, a reliable knowledge how 
to make it, a knowledge of wliat it costs, of 
the profit tiiere is in it, and, if asked, a pretty 
full knowledge of competing things and of the 
extent of the market. The census reports will 
sometimes aid in estimating the market ; the 
editor of a trade paper will sometimes be able 
to indicate where to look. Let the inventor be 
able to offer to the purchaser a business ready- 
made to his hand. 



SALE OF PATENTS. I3 

Employer and employee. — There is one 
class of inventors for whom both justice and 
self interest point out tlie party to whom they 
should first apply to purchase their inventions. 
They are the men who, being employed in 
some shop or factory, devise some patentable 
improvement pertaining to the business car- 
ried on in such shop or factory. The party 
to whom such an inventor should first apply 
is his employer. As a measure of proper pre- 
caution it is well for such an inventor to procure 
his patent before he opens negotiations but to 
be wholly fair he should give his employer the 
first chance to buy it or an interest in it. 

No matter who owiis an invention no one 
but the inventor can lawfully make applica- 
tion for patent for it. If a man has been hired 
to invent and after making the invention he 
refuses to make application for patent and to 
assign it to the owner, the inventor can be 
compelled to do both by process of court. An 
employee's inventions do not belong to his 
employer simply by reason of the employment 
in the absence of some special agreement to 
that effect ; but if an employee makes an in- 
vention in the time and with the tools and 
materials of his employer, nothing being said 



14 SUGGESTIONS ON THE 

as to the ownership of the invention, a patent 
taken therefor belongs to the inventor but the 
employer owns a license to use the invention 
in his business ; such a license is not transfer- 
able and if the employer happens to be a cor- 
poration the license terminates if the corpora- 
tion comes to an end. 

An employer ought to be the first of all men 
to be ready to buy an improvement pertaining 
to his business made by his employee. He 
instantly knows its practical value and can as 
instantly use it. If the improvement is a real 
one, the inventor needs to address no argu- 
ments to him and to be at no expense in de- 
monstrating its value by manufacture and sale 
or otherwise. The employerwill naturally wish 
to acquire the invention at the lowest possible 
figure and the employee should be ready to 
meet him in a liberal and moderate spirit. 
Possibly most inventors need a word of cau- 
tion about this matter of price. No inventor 
of something equal to the telegraph, the tele- 
phone, or Bessemer steel needs to be told that 
he should have a fortune in return for it but 
as to trifling improvements or those of even 
moderate value let the inventor not be a Col- 
onel Sellers and see " millions in it." Even 



SALE OF PATENTS. I5 

as to invention of a great deal of practical value 
let the inventor remember that a few thousand 
dollars salted down safe and sure are a mighty 
good thing and that the field of invention yet 
unworked is limitless. 

In dealings between an employer and em- 
ployee, the purchase of the patent upon a 
royalty ought to be a mode of negotiation 
capable of being made profitable and satis- 
factory to both parties. In cases where the 
employer does not own the kind of a license 
just referred to, and the parties cannot agree 
upon sale of the whole patent, an agreement 
can sometimes be reached by the sale of a 
shop right to the employer, leaving the inventor 
to secure additional remuneration by sales 
to others. 

Speculative purchasers. — Quitting the 
topic of employer and employee it would rea- 
sonably seem that the most legitimate market 
for something to be sold is among those who 
directly and immediately have use for it by 
reason of their trade, business or occupation. 
That is the idea acted upon by sellers of goods 
in general. Apply it to selling patents and 
the inventor would naturally look to find a 
purchaser among those manufacturers who 



l6 SUGGESTIONS ON THE 

can either profitably use his invention in 
their process of manufacture or who make and 
sell things of the same general nature. Nev- 
ertheless patents are sometimes bought by 
other persons ; applications are sometimes 
made to patent solicitors, by other persons 
than such manufacturers, to be directed to pat- 
ents which they can buy and develope with 
profit to themselves ; such applications come 
sometimes from men who have once made 
money out of a patent and are willing to try 
it again, sometimes from men who have long 
been clerks, book-keepers or other sorts of 
employees and who seek to get into business 
for themselves and, again, sometimes from 
men of a purely speculative turn of mind. 
The number of men who make up this class 
is not large, though seemingly on the increase^ 
and it is not a foolish thing to attempt to reach 
them. Such men probably consult the adver- 
tisements under the head of '' Business Oppor- 
tunities " in the Sunday editions of such papers 
as the Neiu York Herald and possibly ad- 
vertisements in the Scientific American. It is 
to be noted that manufacturing firms of stand" 
ing and reputation sometimes advertise for in- 
ventions suitable for their business in the 



SALE OF PATENTS. I7 

" Business Opportunities " column. Therefore 
one may, if he sees fit, and not without reason, 
advertise his improvement for sale in such me- 
diums. In using these papers, to reach the 
speculative class, no good reason is seen for 
stating the nature of the improvement ; it can 
well be named only by the reasonable profit 
it promises. If however the inventor chooses 
to pay for having his improvement illustrated 
and described in the reading columns of the 
Scientific American he may choose to refer 
thereto in his advertisement ; the writer does 
not know enough about the results of such 
illustration and description to warrant him in 
expressing an opinion of its value in making. a 
sale. 

Extravagant pretensions in such advertise- 
ments are worse than useless. Sensible men 
may look among such advertisements for a 
'' good thing " but if they find millions on sale 
for the price of a Eong they take no stock in the 
proposition. A plain simple straight forward 
statement of what is offered for sale is likely 
to be more effectual than the elTusions intended 
to be bizarre or poetical now much in vogue 
among professional advertisement writers. If 
this mode of advertising be employed the space 



l8 SUGGESTIONS ON THE 

taken may be small but it should be persisted 
in moderately, not confined to a single an- 
nouncement. On the other hand it should 
not be continued to the point of incurring 
large expense. This kind of enterprise is not 
mentioned at this point as necessarily the first 
step to be taken. And before trying it it is 
well for the inventor to cast about him for 
such a speculative buyer among his acquain- 
tances and friends. 

If by this mode of advertising enquiries are 
evoked the inventor will need for answer a 
letter and illustration such as is described 
hereinafter under the head of '' Reaching the 
Trade by Correspondence." 

Personal application to the trade. — If 
a patentee has within his personal reach man- 
ufacturers who can take hold of his invention 
with profit to themselves it is the best of all 
methods, as well as the cheapest, to see them 
one by one, face to face, and endeavor to make 
a bargain. If it be undertaken let the inven- 
tor see and talk with the proprietor or chief 
manager of the business. It is generally of 
little use to talk to clerks, mere office men and 
book-keepers though the case is different as to 
master-mechanics and others upon whom rests 



SALE OF PATENTS. I9 

real responsibility. If the inventor gets audi- 
ence with the manufacturer, master-mechanic 
or other person of real interest and responsi- 
bility in the concern, and he has a genuine im- 
provement to sell, perfected as herein before 
advised, he will find an interested listener : 
and he ought not in reason to run the gaunt- 
let of many such without effecting a sale. 

But let him not be discouraged at a dozen 
rebuffs ; he will learn something from each 
experience which will make him better pre- 
pared to deal with the next opportunity. He 
must expect criticisms and it may be that some 
of them will be of a nature to send him back 
to further work in moulding his device into 
marketable cost and shape. As to price, if it 
be mentioned, exhaust all reasonable endeav- 
ors to have the manufacturer name his own. 
Let the manufacturer have the option of out- 
right purchase, or of purchase of the whole 
interest on a specified royalty, or — unless 
there are sufficient reasons to the contrary — 
the purchase of a territorial right either out- 
right or upon a royalty. 

And sometimes the invention is of such a 
nature that a shop right pure and simple is a 
good thing both for the manufacturer to buy 



20 SUGGESTIONS ON THE 

and for the patentee to sell as, for instance, in 
the case of a hardening or tempering com- 
pound or process. In all sales of rights under 
a patent, except a sale in some shape of the 
entire patent, there are certain precautions to 
be carefully put into the instrument of sale — 
treated of hereinafter under the head of 
*' Legal Points " — to make sure that the buyer 
shall not trespass outside of the limits that he 
buys. 

If the manufacturer will not name a price, 
and is yet willing to consider one, the inven- 
tor should be prepared to submit one, wholly 
eschewing the Colonel Sellers point of view, 
and with the proviso that he is still willing to 
consider a lower price named by the manu- 
facturer. 

Reaching the trade by correspond- 
ence. — Quitting the topic of personal applica- 
tion to the trade there yet remains a larger 
field to be worked among manufacturers who 
are out of the inventor's personal reach, man- 
ufacturers whose business is such that they 
would naturally like to possess the invention. 
Complete lists of manufacturers in the various 
trades throughout the United States, can gen- 
erally be procured from one source or another. 



SALE OF PATENTS. 3 1 

There are published directories of nearly all 
the trades Sometimes a dealer in the trade 
can give information as to who publishes such 
a directory. Publishers of directories of any 
sort sometimes have a large knowledge of this 
kind. The editor or publisher of a trade 
newspaper can generally tell whether a direc- 
tory of his trade is to be had and who pub- 
lishes it ; in asking an editor or publisher that 
question by mail be sure to enclose stamps for 
an answer. To find such a trade paper go to 
the office of a daily newspaper and consult the 
newspaper directory issued by any of the large 
advertising agencies, and the trade paper will 
be found catalogued therein if it exists. 

Again, there are concerns in the large 
cities which, for a reasonable consideration 
furnish lists large or small of nearly all the 
trades in the United States, or in any particu- 
lar part thereof. A trade directory or list 
thus written up will furnish the names and ad- 
dresses of a great number of parties who nat- 
urally ought to desire to possess the invention 
useful to their trade. 

Now comes up the important question of 
how to approach them and what to say to them 
by way of correspondence. These manufac- 



22 SUGGESTIONS ON THE 

turers are, as a rule, old and experienced men 
of business who have weathered storm and sun 
in the business world ; no wile or craft will 
avail with them ; an improvement in order to 
be sold to them must have real merit and they 
must be able to see that it is for their interest 
to buy it. It is to such an end as this that the 
inventor has been urged hereinbefore to per- 
fect his device in efficiency, cheapness, form 
and finish. On the other hand there is a 
never relenting and an ever increasing fierce- 
ness of competition among the manufacturers 
of to-day — this being the force that lies behind 
the creation of manufacturing syndicates, 
pools and trusts — and if an inventor can con- 
vince a manufacturer that he has that to sell 
which will give him a substantial advantage 
over his competitors, he will buy it if the price 
is not too high. 

The mode of presenting the improvement 
to manufacturers which is both easiest and 
cheapest is by means of a printed circular de- 
scribing and illustrating it. It is too easy and 
too cheap. It is too little personal. It runs 
great danger of being consigned to the waste- 
basket without serious consideration. But if 
a suitable letter be written, it will be read. 



SALE OF PATENTS. 23 

Therefore the patentee must write a letter. 
After addressing it begin by inviting your cor- 
respondent's attention to your improvement 
as one which apparently can be made of use 
and profit in his business. Proceed immedi- 
ately with the description of the improvement 
and its advantages ; make that description as 
clear as crystal, omitting unimportant details 
and using no superfluous word, to the end that 
the letter may be as short as possible. Be 
forcible. Don't repeat. If the thing is not 
readily made by known processes and you 
have conquered that difficulty — as you should 
have done — say that if he does not see just 
how the thing can be cheaply made, you can 
give him the desired information. Say (if it 
be a fact) that you have informed yourself as 
to first cost and profit but that his acquaint- 
ance wMth the business renders it unnecessary 
for you to go into those matters. Close by 
saying that you hope to dispose of the inven- 
tion to him either outright or upon a royalty, 
or some interest therein, and ask an answer 
looking to that end. 

The preparation of the form for this letter 
which may need to be written to many differ- 
ent parties, first and last, is worth most care- 



24 SUGGESTIONS ON THE 

ful Study. After the patentee has done his 
best, if he still feels that he has not done well, 
let him seek competent aid. As to most pat- 
ented articles an illustration to accompany 
such a letter is needed ; sometimes but not 
often some figure of the patent drawings may 
be reproduced for this purpose ; patent draw- 
ings are generally plan and elevation views not 
suited to this purpose. What is needed here 
is a picture, a perspective view ; this can be 
had in the form of an engraved "cut " printed 
on a slip of paper or a competent artist can 
make the drawing on tracing cloth and "blue 
prints" thereof can be used. The blue print 
paper and a small printing frame are both 
cheap things ; any draughtsman or amateur 
photographer can teach in a single lesson how 
to make the blue prints 

This letter can be sent to a number of dif- 
ferent manufacturers at the same time provid- 
ed no two of them are located near each other ; 
it is not desirable that they compare notes in 
the matter. The handwriting of this letter 
need not be fine but it should be clearly leg- 
ible ; if the inventor does not write a clear 
hand possibly some member of his family 
does; a type- written letter suits the custom 
of the present day best of all. 



SALE OF PATENTS. 25 

The sending (jf this letter to one manufac- 
turer after another, till some favorable result 
comes about, should be persisted in until either 
the whole list is exhausted or the inventor be- 
comes satisfied that for some reason — and he 
will be apt to discover it — the improvement 
is not salable. Let the inventor be not dis- 
turbed if now and then an answer comes say- 
ing that the improvement is an old or aban- 
doned thing; if such a remark be hunted 
down it will prove in ninety-nine cases out of 
a hundred to be a mistake if not worse than 
that. 

It may happen that some manufacturer will 
raise the question whether the invention does 
not infringe some prior patent or a question as 
to the breadth of the claim of the patent which 
the inventor seeks to sell ; here the water is 
generally too deep for the inventor to go alone 
and if so, he must consult with some person 
versed in the law and mechanics of the matter. 

The infringement question can generally be 
bridged over in a royalty contract by provid- 
ing that the licensee shall have the option of 
terminating the license if a court of final and 
competent jurisdiction shall adjudge the im- 
provements to infringe some prior and valid 
patent. 



26 suggestions on the 

Reaching the trade by advertising. — - 
Another mode of reaching manufacturers is 
by advertising it for sale in suitable trade pa- 
pers, using a small advertisement, in the reg- 
ular advertising columns, naming the improve- 
ment, and persisting therein moderately. In 
addition, it is usually feasible to have the im- 
provement illustrated and described in the 
reading columns of the paper for a considera- 
tion. The suitable trade papers can be ascer- 
tained from the newspaper directories' already 
mentioned issued by the large advertising 
agencies. Where a number of papers seem to 
be of the right class it is well for the inventor 
to procure a sample copy of each to choose 
therefrom which he will use. 

When an inventor receives an answer to 
such an advertisement he needs for first reply 
a letter (and illustration if proper) much the 
same as already described under the heading 
of " Reaching the Trade by Correspondence." 

Joint-stock corporations. — Many a pat- 
ent is sold by making it the basis of the organ- 
ization of a joint-stock corporation under the 
statute laws of some state. This proceeding 
has the advantage that it allows, if desired, a 
large number of persons to become interested 



SALE OF PATENTS. 27 

in the enterprise, each venturing more or less 
as he sees fit — the par value of shares being 
generally $ioo each — and it has the further 
advantage that each party interested has no 
liability beyond the shares for which he sub- 
scribes. It is a common fault in these enter- 
prises that the capital stock is made too large 
and that not enough of actual cash is paid in. 
When a patentee's invention is of undoubt- 
ed merit and he can find a few persons, more 
or less, who will put in capital enough to es- 
tablish the manufacture, it is well enough that 
the capital stock be no larger than double the 
amount of cash paid in, the half which is not 
in cash being paid for by the patent. Then, 
if no salaries are paid to officers of the corpo- 
ration until the earnings of the business war- 
rant it, (and afterward only such as are war- 
ranted by the earnings and by the services 
actually rendered) and all hands pull together 
for success, the enterprise is likely to prove 
profitable to all concerned. Far too often the 
capital stock is put up into high figures, little 
or no cash is paid in, and thus handicapped, 
many a meritorious invention has been con- 
signed to inaction and practical oblivion. 
Royal roads to w^ealth are as scarce as royal 



28 SUGGESTIONS ON THE 

roads to learning and when one is found there 
is almost always found with it a pack of fools 
to cast up the highway. 

One or more men of means can sometimes 
be found to promote such a joinc-stock enter- 
prise by the gift, as a bonus, of some part of 
the stock allotted to the patentee for his in- 
vention, the consideration being that they will 
subscribe for other stock and will secure sub- 
scribers for the remainder of the stock ; such 
an arrangement is usually kept confidential 
between the parties thereto but it will not 
answer for the patentee to tell an untruth 
about it to some person to induce him to sub- 
scribe for stock ; for if A, a patentee, gives 
such a bonus to B in order to get B into the 
enterprise and then, by actual deception 
practiced upon C with reference thereto, C is 
induced to subscribe, and then C suffers loss 
in the enterprise, a court would be apt to say 
that C was induced to subscribe by means that 
were fraudulent. 

The organization of such a joint-stock cor- 
poration, and compliance with statutory re- 
quirements thereafter should be under the ad- 
vice of competent legal counsel ; otherwise 
personal liability is sure to attach to all con- 
cerned in the enterprise. 



SALE OF PATENTS. 29 

Price of pariial rights. — When a pat- 
entee has decided what price he will accept 
for his entire patent, he readily has a basis for 
determining the price of a lesser territorial 
right. He should ask three or four times as 
much for a single state, judged by the number 
of its people, than he would in selling all the 
states together. And a single county should 
sell alone for twice as much as when com- 
bined with all its fellow counties in the state. 
The same idea should govern in determining 
the price of a shop-right or of any other kind 
of a partial right. If, however, the patent is 
for device or process used in manufacturing, 
then the right for a non-manufacturing state, 
such as are some of the southern states, is 
worth just what it will sell for and no more, 
no matter how small that sum may be. 

Traveling salesmen of patents — The 
remarks under this head have more of curious 
than practical interest. The race is dying 
out but specimens are still to be met occasion- 
ally and a genuine specimen is an interesting 
fellow. As they always own the patents under 
which they operate no one is likely to be able 
to employ them. They seem to fairly *' hyp- 
notize " their purchasers. They will sell a 



30 SUGGESTIONS ON THE 

county right, under a patent for a window 
fastener, to a butcher, and under a churn, to 
a tailor. The patent they sell always pertains 
to something of wide consumption by the 
common people ; it is a patent for a fence, a 
churn, a window fastener, a pie-plate or a 
boot-jack. They have no use for patents on 
fire-arms, railway ties or Bessemer converters. 
Sometimes, though not often, they operate in 
the smaller cities but the country village or a 
farming community is their favorite stamping 
ground. 

They come to towai and stop at the tavern. 
They tell the inn-keeper all about their inven- 
tion, their intention to sell rights and their 
success elsewhere. If there is a local person- 
age likely to be of use to them, they hunt him 
up and enlist his services — for a considera- 
tion. They find out about pretty much every- 
body in town, their business, their means and 
whether their temper is speculative or other- 
wise. These traveling salesmen of patents 
always have finely finished models or ma- 
chines, embodying the invention, handsome to 
look at ; such a thing they set up either in the 
tavern bar-room, or in front of the inn or in 
the village store ; they hang on it a bunch of 



SALE OF PATENTS. 31 

descriptive and illustrated circulars, each bear- 
ing the invitation to *' Take One." They 
never weary in talking about the invention 
and in explaining it, even to women and boys. 
If it is a thing that admits of an exhibition 
they give one or more and see that the whole 
neighborhood is invited. If the locality boasts 
of a newspaper the editor is made to under- 
stand and appreciate the invention and his 
paper describes it fully and favorably. 

When a man bites at the bait they keep that 
matter wholly secret till a sale is made ; they 
do not care to have conservative neighbors 
advise with the man who is thinking of buy- 
ing, and when a sale is made the whole thing 
is over before the neighbors know anything 
about it. After the sale the patent-right man 
changes his whole tune about secrecy ; then 
he tells everybody and is sometimes able to 
make three or four other sales upon the 
strength of the first ; he knows that men fol- 
low one another in such a matter, as sheep fol- 
low their leader over a wall. 

In making a sale, these patent-right men in- 
sist upon some cash or good promissory notes 
but for the balance they will take a mountain 
pasture or a yearling bull. They sell all the 



32 SUGGESTIONS ON THE 

things that they take in exchange at some 
price before they leave town but are not averse 
to driving away with a good horse and buggy. 

These gentlemen care as little about the 
strength of the claims of their patents as does 
a circus clown about the presence of nitter in 
his songs. They want something to sell which 
is a marvel to the eye and the common sense 
of plain people. They know that the ques- 
tions of claims and infringements are Greek 
to the people with whom they have to deal 
and if, by chance, they run against a patent 
solicitor they muzzle him with a "retainer." 

They have as keen a nose for that man in a 
crowd who might buy a right as a pointer has 
for a partridge. They have all the peculiar 
ability which goes to make up a good insur- 
ance or book agent and an added shrewdness 
which is a small fortune in itself. The man- 
ner of their creation is as little understandable 
as that of a comet. 

If a patentee sees fit to undertake this sort 
of thing he should always have on hand two 
or three certified copies of his patent (to be 
had by paying for them, from the Patent 
Ofifice) for delivery to purchasers and he 
should arrange with some banker or other 



SALE OF PATENTS. 33 

person of known business standing, to vouch 
by letter or telegraph for the integrity and 
character of the patentee. When a purchaser 
of a right wants to make sure of his title, the 
purchase money can be deposited with a bank, 
there to remain for three months after the 
purchase, before delivery to the patentee, for 
the holder of any prior conveyance must re- 
cord it within three months to defeat a later 
conveyance. 



34 SUGGESTIONS ON THE 



PART II. 



LEGAL POINTS. 

The U. S. Conveyancing Statute is : "Sec. 
Every patent or any interest therein 
shall be assignable in law by an instrument in 
writing ; and the patentee or his assigns or 
legal representatives may, in like manner, grant 
and convey an exclusive right under his pat- 
ent to the whole or any specified part of the 
United States. An assignment, grant, or con- 
veyance shall be void as against any subsequent 
purchaser or morgagee for a valuable consid- 
eration, without notice, unless it is recorded 
in the Patent Office within three months from 
the date thereof." This section mentions di- 
rectly two kinds of conveyance under a patent^ 
** assignment " and " grant ; " and it indirectly 
mentions a "mortgage " by its use of the word 
'* mortgagee." There is a fourth kind of con- 
veyance, a " license," which is a creature of 
the common law. As a matter of course, pat- 
ents are also proper subject-matter for con- 
tracts of various sorts, the same as other kinds 
of property. 



SALE OF PATENTS. 35 

An assignment has been defined by the 
Supreme Court, in defining an assignee, thus : 
" An assignee is one who holds, by a valid 
assignment in writing, the whole interest of a 
patent, or any undivided part of such whole 
interest, throughout the United States."^ An 
^'instrument in writing" may be wholly in 
print as to the body thereof, but the signature 
must be in writing. A patentee might convey 
to another person the exclusive and irrevoc- 
able right to make and use and vend the pat- 
ented thing throughout the whole United 
States, until the expiration of the patent, and 
that conveyance might not be an assignment, 
for the patentee might still hold the right to 
sue for infringement, to reissue, and to dis- 
claim. An assignment must cover every right 
in a patent.^ It does not need to be sealed, 
even by a corporation f neither does it need 
to be witnessed or acknowledged. " Inven- 
tions may be assigned before they are patent- 
ed."* Such assignments vest the title in the 
assignee, though the patent may issue in the 
name of the assignor.^ An assignment of a 
patent carries with it all reissues of such pat- 
ent f but not an extended term thereof, unless 
it contains apt words to that effect. To assign 



36 SUGGESTIONS ON THE 

a patent for the " term for which the said let- 
ters patent are or may be granted " has been 
held sufficient/ A contract to assign future 
inventions in a given field is one that courts 
will enforce.^ When patent owners assign cer- 
tain patents " together with the right to modi- 
fications, improvements, or reissues thereof, 
and all other and similar patents in the United 
States which may be issued to us or any of us, 
directly or indirectly, in aid of the improve- 
ments above specified," such assignment does 
not cover subsequently invented improve- 
ments not covered by the claims of any of the 
existing patents specified in such assignment.^ 
One of two administrators on an estate may 
make a valid assignment of the patent of the 
deceased.^*^ A conveyance by a person of '* all 
his property and estate, whatsoever and where- 
soever, of every kind and description," includes 
patents he mayown/^ "An assignment of an 
imperfect invention, with all the improve- 
ments upon it that the inventor may make, is 
equivalent in equity to an assignment of the 
perfected results."^^ It has been held by 
circuit courts that a trustee appointed by a 
court for that purpose cannot make a valid 
assignment of the patent-right of another ;^* 



SALE OF PATENTS. 37 

it has been held by other courts that it can 
be done •/* and the Supreme Court, having one 
of these latter cases before it said : "The 
clause of the decree below appointing a trustee 
to execute an assignment if the patentee 
should not himself execute one as directed by 
the decree, has not been objected to in argu- 
ment, and was clearly within the chancery 
powers of the court as defined in the statutes, "^^ 
thus declining to pass on the question until 
squarely before it. On motion a court (in 
New York) may compel a judgment debtor to 
execute the order of his receiver and make an 
assignment of his patent.^*^ That a receiver 
can convey a mere equitable title in a patent 
is hardly open to question/^ An assignee 
under the national bankrupt act (Revised 
Statutes, Sec. 5046) acquired a title to the 
bankrupt's patents without any assignment by 
the bankrupt.^^ An assignment made upon 
the consideration of the payment of an an- 
nuity cannot be revoked by the assignor be- 
cause the annuity is not paid.-^^ As between 
an assignor and an assignee an oral assign- 
ment is good.^'' The execution of an assign- 
ment by a person who signs his name with the 
addition of " President " conveys his own pat- 



38 SUGGESTIONS ON THE 

ent and not that of a company. ^^ An assign- 
ment of a patent not specially mentioned in the 
assignment conveys an equitable tide only.^^ 
The mere assignment of a patent does not 
carry past damages or profits for infringe- 
ment.^^ In a state where, as in the state of 
New York, married women have full control 
of their own property, a married woman may 
make an assignment without joining her hus- 
band.^* A conveyance which does not iden- 
tify a patent or an application for a patent or 
an invention conveys merely an equitable, in 
distinction from a legal title. ( Wright v. Randel^ 
19 Blach., 495 ; Engine Co.\. Engine Co., 58 
O G., 1695.) 

A GRANT has been defined by a judge, in 
defining a grantee, thus : '' A grantee is one 
who has had transferred to him, in writing, the 
exclusive right under the patent, to make and 
use, and to grant to others to make and use, 
the thing patented, within and throughout 
some specified part or portion of the United 
States. Such right must be an exclusive sec- 
tional right, excluding the patentee there- 
from."^^ A grant must convey every right 
under a patent for some specified territory less 
.than the whole. Excluding definitions, every- 



SALE OF PATENTS. 39 

thing which has just been said with reference 
to assignments is equally true of grants. 

A MORTGAGE OF A PATENT is recognized by- 
section 4898 of the Revised Statutes. As it 
conveys no larger interest than an assignment, 
it cannot, on principle, and so far as federal 
laws and federal courts are concerned, require 
either sealing, witnessing, or acknowledge- 
ment, for an assignment or grant requires 
neither, but as a suit to foreclose such a mort- 
gage is an action on contract and not a " case 
* * arising under the patent right * * 
laws of the United States," it may be brought 
in a state court, and must be brought there 
unless the diverse citizenship of the parties 
gives a federal court jurisdiction. For this 
reason, the formalities that state laws require 
as to mortgages should be observed. It will 
be prudent to provide in the mortgage for 
legal service on the mortgagor (in case of fore- 
closure) not requiring personal service. 

A LICENSE is a right to make or vend or use 
(one, two, or all three) a patented thing, not 
amounting to an assignment or grant. A 
license may be irrevocable, it may be exclu- 
sive, it may cover the whole United States, it 
may extend till the expiration of the patent. 



40 SUGGESTIONS ON THE 

and still be only a license, for it may do all 
these things and yet leave the right to sue for 
infringement, the right to reissue the patent, 
and the right to disclaim under it in the pat- 
ent owner. It need not be in writing,^^ and it 
need not be recorded.^^ A license is not trans- 
ferable by the licensee, unless the license ex- 
pressly, or by sufficient implication, makes it 
so.^'^ "The instrument of license is not one 
which will carry the right conferred to any 
one but the licensee personally, unless there 
are express words to show an intent to extend 
the right to an executor, administrator, or as- 
signee, voluntary or involuntary."^^ When a 
license contains no time limit and no expressed 
right of revocation it is irrevocable unless by 
some fault of the parties. ^^ Where a license 
acknowledges the validity of the patent, the 
licensee is estopped from denying that valid- 
ity f^ but in the absence of such an acknowl- 
edgement the licensee is not thus estopped.^^ 
A licensee can be sued as an infringer if his 
acts are not within the license and are such as 
would make a stranger to the license an in- 
fringer.^^ A licenser cannot abrogate a license 
which the licensee stands to, and sue the li- 
censee as an infringer. If a license expressly 



SALE OF PATENTS. 41 

States that a breach of condition shall work a 
forfeiture of the license that result will follow 
such breach, but otherwise the forfeiture must 
be decreed by a court,^^ and a bill in equity 
will lie to declare such forfeiture ^* It has 
been held that one of joint owners under a 
patent may grant a license thereunder,*^ but 
that proposition cannot betaken as fully es- 
tablished. '' A recovery (against an infringer) 
does not vest the infringer with the right to 
continue the use, as the consequence of it may 
be an injunction restraining the defendant 
from the further use of it."^^ He who acquires 
the right to the use of a certain machine takes 
the right to repair it and to replace parts there- 
of, but not to wholly replace such machines- 
Assignees and grantees under patents take 
their interests subject to all existing licenses.^* 
In the case of a revocable license an assign- 
ment of the patent works the revocation. ^^ 

Recording. — The last clause of Sec. 4898 
of the Revised Statutes is : " An assignment, 
grant, or conveyance shall be void as against 
any subsequent purchaser or mortgagee for a 
valuable consideration, without notice, unless 
it is recorded in the Patent Office within three 
months from the date thereof." The only con- 



42 SUGGESTIO^S ON THE 

veyances under a patent that the hiw requires 
to be recorded at all are assignments, grants, 
and (by indirect mention) mortgages. The 
law does not require a license to be recorded, 
and a record thereof is not, therefore, con- 
structive woXio.^ to any one of its existence ;*^ 
but as a record thereof is quite likely to bring 
home actual wolxdQ to an intending purchaser 
of the patent, such recording may servea very 
useful purpose. - Unrecorded assignments, 
grants, and mortgages, are perfectly good be- 
tween the parties thereto, and also against 
all who have actual notice thereof, but, unless 
recorded " within three months from the date 
thereof," (and this means the actual date of 
execution,) they are not good " against any sub- 
sequent purchaser or mortgagee for a valuable 
consideration without notice.*^ The convey- 
ance of a right to sue for damages after a pat- 
ent has expired need not be recorded.*^ The 
title of a bankrupt's assignee under Sec. 5046 
of the Revised Statutes did not need to be re- 
corded.*^ 

Warranty. — If the maker of any kind of 
conveyance under a patent expressly warrants 
his title, such maker is, of course, bound to 
make the warranty good. Equally as a mat- 



SALE OF PATENTS. 43 

ter of course, if such maker expressly states in 
the conveyance that he only conveys such title 
as he has, he does not warrant his title. But 
if a conveyance recites and specifies a certain 
interest in a patent as being conveyed, then, 
on principle, the maker ought to be held to 
convey that interest although the conveyance 
contains no specific warranty of title. " Who- 
ever assumes to sell a patent assumes to sell 
that property, and assumes that he had it to 
sell."** 

Undivided interests in patents. — The 
relative rights of owners of undivided interests 
in the same patent are those of tenants in com- 
mon. Either can sell his interest without con- 
sulting tlie other. Either can use the patent 
without consulting the other or making to the 
other any contribution of his profits. Of course, 
neither can grant an exclusive license under 
the patent ;*^ but it has been held that either 
can alone grant a license that is not exclusive.*^ 
In commenting on this question a learned 
judge said : '^ None of the parties interested 
has any right to control the action of the other 
parties, or to exercise any supervision over 
them. It is difficult to see how an equitable 
right of contribution can exist among any of 



44 SUGGESTIONS ON THE 

them, unless it includes all the parties inter- 
ested, and extends through the whole term of 
the patent right. And if there be a claim for 
contribution of profits, there should also be a 
correlative claim for losses, and an obh"gation 
upon each party to use due diliigence in mak- 
ing his interest profitable. It is not and can- 
not be contended that these parties are co- 
partners ; but the idea of mutual contribution 
for profits and losses would require even more 
than copartnership.'"*^ 

Nevertheless the majority of owners of un- 
divided interests in patents desire that the 
entire patent shall be managed as one inter- 
est ; and forms of assignment to tliat effect 
are given in Part 111. 

Territorial interests in patents. — 
Where different parties own different territo- 
rial interests under the same patent their rela- 
tive rights and liabilities are a matter of im- 
portance. The grantee of an exclusive right 
to make and use and vend a patented machifie 
has the right to vend the products of such ma- 
chine in or out of the territory covered by the 
grant.^^ In one case, where the patent in 
question was for a coffin lid, A owned the ter- 
ritory which included Boston, and B owned 



SALE OF PATENTS. 45 

the territory which included Natick; one Burke 
bought one of the coffin lids in Boston and 
used it in Natick ; B sued Burke as an infring- 
er. The Supreme Court said that the precise 
point in issue had never been decided before by 
that court, and that the vast pecuniary results 
involved admonished that court to proceed 
with care, " and to decide in each case no 
more than what is directly in issue." The 
court held that as regards the kind of patented 
improvement in question, "an instrument or 
product of patented manufacture which per- 
ishes in the first use of it, or which, by that 
first use, becomes incapable of further use, and 
of no further value," one who, like Burke, had 
purchased it of the grantee and used it out- 
side of the grant, was not an infringer/* La- 
ter a circuit court decided that when A owns 
certain territory under a patent and B owns 
other territory the same patent, then if A sells 
the patented thing, contracting to deliver it in 
the territory of B, A is an infiinger of the right 
of B, but if A sells the patented thing in the 
ordinary course of trade to C, knowing that C 
will take it into the territory of B, then neither 
A nor C is an infringer of the rights of B.^*^ 
In Part III there are given forms for the 



46 SUGGESTIONS ON THE 

conveyance of territorial rights intended to 
guard the interests of the different territorial 
owners. 

Royalty conuract. — He who purchases 
an interest in a patent, upon royalty, without 
directly agreeing to prosecute the business to 
which the patent refers, enters into an implied 
contract to do so.^^ Where one party uses the 
patent of another, under promise to pay for 
the same, but the specific sum is not agreed 
upon '' the law will imply a reasonable price. "^^ 

State restrictive laws. — All state laws 
which place any unusual restrictions upon 
patents or prescribe any extraordinary form- 
alities connected with the sale thereof are void 
and that clearly so,^^but rights exercised under 
patents are subject to the ordinary police laws 
of the state. ^ A state cannot exempt coun- 
ties or other municipal corporations for liabil- 
ities for infringement of patents.^^ Equity 
procedure in suing on patents is not to be re- 
stricted by state laws " the equity jurisdiction 
of the courts of the United States is subject to 
neither limitation nor restraint by the state 
authorities."^^ {\) Moored. Marshy 7 Wall., 
515, (2) GaylevN. Wilder^ 10 How., 477. (3) 
Gottfried N. Miller, 104 U. S., 521. (4) Cam- 



SALE OF PATENTS. 47 

meyer v. N'eivton, 94U. S., 225. (5) Gayler v. 
?f^//^^r, 10 How., 477. {(i) Little field y. Fer- 
ry ^ 21 Wall., 205. (7) Thayer v. Wales, 5 
Fish. P. C, 448. (8) Nesmith y. Calvert, i 
W. & M., 34. (9) Stebbins Co., v. Stebbins, 4 
Fed. Rep., 445. (10) Wintermute v. Redmg- 
ton, I Fish. P. C, 239. (11) i?. i?. C^. v. 
Trimble. 10 Wall., 367. (12) Lit tie field v. 
Ferry, 21 Wall., 205. (13) Ashcrofit v. J^i^<^/- 
■worth, I Holmes, 152 ; Gordon v. Anthony, 16 
Blatch., 234. (14) Murray v, Ager, 1 Mac- 
key, 87 ; Wilson v. T^/r^ Alarm Co., 52 O. G. 
901. (15) ^^^r V. Murray, 105 U. S., 126. 
{16) CA??z i?^;/^/^ V. Wyckoff, 41 N. Y. Sup., 
527. (17) Adams \. LLoivard, 23 Blatch., 27. 
(18) PrinuN. Brandon Co , 16 Blatch., 453 ; 
Kittle \. LLall, 29 Fed. Rep., 508. (19) Llarts- 
/lornY. Day, 19 How., 211. (20) Burke v. 
Partridge, 58 N. H., 349. (21) Campbell v. 
James, 17 Blatch., 42. (22) WrightN. Randel, 
19 Blatch., 495. (23) Merria?n v. Smith, 11 
Fed. Rep., 588. (24) Fetter v. Newhall, 21 
Blatch. ,445. (25) Fotter v. LLolland, 4 Blatch., 
206. (26) Chambers v. Smith, 5 Fish. P. C, 
12. (27) Z/'^jK Factory v. Corning, 14 How,, 
193. (28) Oliver v. Chemical Works, 109 U. 
^•j 75- (29) X^/Zy V. Forter, 8 Saw., 482. 



48 SUGGESTIONS ON THE 

(30) Washburn &: Moen Co. n Fence Co.., 22 
Fed. Rep., 712. (31) Burr Y.Duryee, 2 Fish. 
P. C, 275. (32) Goodyear v. Rubber Co.^ 2 
Cliff., 351 ; Ruffle Co. v. Elm CUy Co.^ 13 
Blatch., 151. {2>?>) kartell v. Tilghmann, 99 
U. S., 547. (34) Adams v. Meyrose, 10 Fed. 
Rep., 671. (35) Dunham v. R. R. Co., 7 Biss., 
223. {z^i) Suffolk Co. V. Hay den, 3 Wall, 315. 
(37) Wilson V. Simpson, 9 How,, 109. (38) 
McClurg V. Kingsland, i How., 202. (39) 
Faulks V. Kamp, 3 Fed. Rep., 898 ; Shaw v. 
Colwell Lead Co., 11 Fed. Rep., 711. (40) 
IVright Y.Ra?jdel, 19 Blatch., 495. {j\i) Brooks 
V. By am, 2 Story, 525 ; Ferry v. Corning, 7 
Blatch., 195. (42) Gear v. Fitch^ 3. B. & A., 
573- (43) Frime v. Brandon Co., 16 Blatch., 
453. (44) Faulks w. Kamp, 3 Fed. Rep., 898. 
(45) Pitts V. ZT^//, 3 Blatch., 201. (46) Clum 
V. Brewer, 2 Curtiss C. C, 506. (47) Vese v. 
Singer, 4 Allen, 226. (48) Simpson v. ^/Z- 
son, 4 How., 709. (49) Adams v. Burke, 17 
Wall., 453. (50) Hobble v. Smith, 27 Fed Rep., 
656. (51) Wilson V. Martow, 66 111., 385. 

(52) Milligan v. J/^. O.. 21 Fed Rep , 570. 

(53) Readv. Miller, 2 Bliss., 12. {54) Fatter- 
son V. ^., 97 U. S., 501. (55) May v. O?/;?- 
tyo/Ralls,si Fed Rep., 473. (56) Tel. Co. 
V. N. v., 31 Fed. Rep., 312. 



SALE OF PATENTS. 



PART III. 



49 



FORMS. 

In all these forms the words in italics denote the 
words that are variable for different patents, places, 
parties, etc. 

And further. Each form runs from " John J. Doe of 
Ha7tford\ Connecticut" to ''' Richard J. Roe of New 
Haven, Connecticut.'''' To make desired variations in 
any form observe this note : 

Note. — If either party consists of a plurality of per- 
sons it may be written like this: ^^ Allen B. Smith of 
Hartford, Connecticut and 7 horn as B. Jones of New 
Haven, Connecticut :" in such case change the termi- 
nation of the proper verbs to the plural. If either party 
be a joint stock corporation it may be written like this : 
" The Smith Manufacturing Company, a joint stock 
corporation f 01 med under the laws of the State of Con- 
necticut and located at Hartford in that state." 



ASSIGNMENT OF LETTERS-PATENT. 
(Entire Interest, before Issue by Inventor.) 
BE IT KNOWN that John J. Doe of Hartford, 
Connecticut^ for the consideration of One Hundred dol- 
lars, receipt whereof is hereby acknowledged, hereby 
assigns to Richard J. Roe of New Haven, Connecticut^ 
the invention in Plows set forth in the application by 
assignor for letters-patent of the United States of Amer- 
ica, wherein the oath is dated the 4th day oi fuly, 1892, 



50 SUGGESTIONS ON THE 

with all rights secured by said patent when issued : and 
the Commissioner of Patents is authorized and request- 
ed to issue said patent to said assignee . Said assignor , 
also acting for the heirs, executors, and administrator 
of said assignor , covenants, promises, and agrees to 
and with said assignee , and the heirs successors and as- 
signs of said assignee, that whenever the legal coun- 
sel of said assignee , or of said heirs, successors, or as- 
signs, advises that any reissue of said patent is lawful 
and desirable, then said assignor will sign all papers 
take all lawful oaths, and do all acts necessary or con- 
venient for the procurement of such reissue, the same to 
be free of all expense to said assignor . Said assignor » 
acting also for the heirs, executors, and administrators of 
said assignor , covenants with said assignee , and with 
the heirs, successors and assigns of said assignee , that 
the interest and property hereby conveyed are free from 
all prior assignment, grant, mortgage, license, and every 
other incumbrance. 

Dated February ist, i8gj. 

John J. Doe. 
Witness : 

William W. Smith, 

Charles S. Jones, 



ASSIGNMENT OF LETTERS-PATENT. 

(Undivided Interest, before Issue by Inventor.) 
BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Hundred dol- 
lars, receipt whereof is hereby acknowledged, hereby 
assigns — upon the condition hereinafter expressed — to 



SALE OF PATENTS. 5 1 

Richard J. Roe of New Haven Connecticut^ one undi- 
vided half oi the invention in Plows set forth in the ap- 
plication by assignor for letters-patent of the United 
States of America, wherein the oath is dated the 4th day 
of Jul}\ 1892, with the same part of all rights secured 
by said patent when issued ; and the Commissioner of 
Patents is authorized and requested to issue said patent 
to said assignor and said assignee jointly. Said con- 
dition is made binding upon said assignor, and upon the 
heirs, successors, executors, administrators, and assigns 
of said assignor ,by the signing of this instrum.ent ; it 
is made binding upon said assignee , and upon the 
heirs, successors, executors, administrators, and assigns 
of said assignee , by the acceptance of this instrument ; 
and it is as follows : — no license shall or can be made 
under said patent other than by all the owners thereof 
joined in a writing ; and no use shall or can be made 
of the improvement covered by said patent by any own- 
er of an interest in said patent without the written con- 
sent of all the other owners of interests in said patent. 
Said sssignor . acting also for the heirs, executors, and 
administrators of said assignor , covenants with said 
assignee, and with the heirs, successors, and assigns of 
said assignee , that the interest and property hereby 
conveyed are free from all prior assignment, grants 
mortgage, license, and overy other incumbrance. 

Dated Febi uaty ist, i8g3. 

fohn J. Doe, 
Witness : 

William TT: Smith, 

Charles S. fanes. 



52 SUGGESTIONS ON THE 

ASSIGNMENT OF LETTERS-PATENT. 
(Entire Interest, after Issue, by Inventor.) 

BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Hundred dol- 
lai's, receipt whereof is hereby acknowledged, hei-eby 
assigns to Richard J. Roe of New Haven^ Connecticut, 
the invention in Plows patented to said assignor in and 
by letters-patent of the United States of America, No. 
100,000 dated the 4th day oi July, 189^, with all the 
rights secured by said patent. Said assignor , acting 
also for the heirs, executors, and administrators of said 
assignor , promises and agrees to and with said as- 
signee , and with the heirs, successors, and assigns of 
said assignee , that whenever the legal counsel of said 
assignee ,or of said last mentioned successors or assigns 
advises that any reissue of said patent is lawful and 
desirable, then said assignor will sign all papers, take 
all lawful oaths, and do all acts necessary or convenient 
for the procurement of such reissue, the same to be free 
of expense to said assignor . Said assignor acting also 
for the heirs, executors, and administrators of said as- 
signor , covenants with said assignee , and with the 
heirs, successors, and assigns of said assignee , that the 
interest and property hereby conveyed are free from all 
prior assignment, grant, mortgage, license, and every 
other incumbrance. 

Dated February ist, 18^3. 

John J. Doe. 
Witness : 

William W. Smith, 

Charles S. Jones. 



SALE OF PATENTS. 53 

ASSIGNMENT OF LETTERS-PATENT. 

(Undivided Interest, after Issue.) 

BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Uundred dol- 
lars, receipt whereof is hereby acknowledged, hereby 
assigns — upon the condition hereinafter expressed — to 
Richard J. Roe of New Haven, Connecticut^ one undi- 
vided half oi the invention in Plows patented io Henry 
H. Robinson, in and by letters-patent of the United 
States of America, No. 200,000, dated the 4th day of 
y«/j/, i8g2, with the same parts of all rights secured by 
said patent. Said condition is made binding upon said 
assignor , and upon the heirs, successors, executors, ad- 
ministrators, and assigns of said assignor, by the signing 
of this instrument ; it is made binding upon said as- 
signee , and upon the heirs, successors, executors, ad- 
ministrators, and assigns of said assignee , by the ac- 
ceptance of this instrument ; and it is as follows :^no 
license shall or can be made under said patent other 
than by all the owners thereof joined in a writing ; and 
no use shall or can be made of the improvement cov- 
ered by said patent by any owner of an interest in said 
patent without the written consent of all the other own- 
ers of interests in said patent. Said assignor , acting 
also for the heirs, executors, and administrators of said 
assignor , covenants with said assignee , and with the 
heirs, successors, and assigns of said assignee , that the 
interest and property hereby conveyed are free from all 
prior assignment, grant, mortgage, license, and every 
other incumbrance. 

Dated February ist, i8gj. John J. Doe. 

Witness: 

William IV. Smith, 

Charles S. Jones. 



54 SUGGESTIONS ON THE 

ASSIGNMENT OF LETTERS-PATENT. 
(After Issue, in General.) 

BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Hundred dol- 
lars, receipt whereof is hereby acknowledged, hereby 
assigns to Richard J. Roe of New Haven, Connecticut, 
interest as follows in the invention in /'/cwj patented to 
Henry H. Robinson^ in and by letters-patent of the 
United States of America, No. 200,000, dated the 4tk 
day oi July, j8g2,w\\.\i the same interest in said patent 
and in all rights secured by said patent, said interest in 
said invention, and in said patent, and in all rights 
secured by said patent being three undivided fourths of 
the same. Said assignor, acting also for the heirs, ex- 
ecutors, and administrators of said assignor , covenants 
with said assignee , and with the heirs, successors, and 
assigns of said assignee , that the interest and property 
hereby conveyed are free from aU prior assignment, 
grant, mortgage, license, and every other incumbrance. 

Dated February Jst^ iSgj. 

John J. Doe. 
Witness: 

William IV. Smith, 

Charles S. Jones. 

(When such an assignment as this is given the differ- 
ent owners have ordinary undivided interests and may 
operate independently of each other.) 



GRANT UNDER LETTERS-PATENT. 
BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Hundred do\- 
lars, receipt whereof is hereby acknowledged, hereby 



SALE OF PATENTS. 55 

assigns and giants — subject to the condition hereinafter 
expressed — to Richard J. Roe of Ntw Haven, Connecti- 
cut^ the entire interest and ownership in the invention 
in Flows patented to Henry H. Robinson, in and by 
letters-patent of the United Slates of America, No. 
200,000, dated the 4tk day oijuly, 189^, with the entire 
interest and ownership in and to all the rights secured 
by said patent, within and throughout the territory de- 
scribed as follows — and in no other place — to wit : The 
State of Connecticut. Said condition is that no person 
or party deriving right through or under this grant has 
any right or power to practice any art, process, or meth- 
od patented by said patent outside of said described 
territory, or to knowingly part with anything patented 
in and by said patent to be carried outside said de- 
scribed territory ; and any person or party deriving 
right through or under this grant, who does either of the 
acts thus above forbidden, or who after due information, 
parts with such patented thing to a person or party who 
has once carried such patented thing outside said de^ 
scribed, territory, thereby forfeits to said grantor and to 
the heirs, successors, and assigns of said grantor , his, 
its, or their entiie right, interest, and license in, to, and 
under said patent. Said grantor, acting also for the 
heirs, successors, executors, administrators of said gran- 
tor , covenants with the said grantee , and with the 
heirs, successors, and assigns of said grantee , that the 
interest and property hereby conveyed are free from all 
prior assignment, grant, mortgage, license, and every 
other incumbrance. 

Dated February ist, iSgj. John J. Doe. 

Witness : 

Willi im W. Smith, 

Charles S. Jones. 



56 SUGGESTIONS ON THE 

EXCLUSIVE TERRITORIAL LICENSE UNDER 
LETTERS-PATENT. 

BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Hundred dol- 
lars, receipt whereof is hereby acknowledged, hereby 
conveys the exclusive right and license — subject to the 
conditions hereinafter expressed — to Richard J. Roe 
of New Haven, Connecticut, to practice, make, use and 
vend the improvement in Plows patented to Heniy H. 
Robinson, in and by letters-patent of the United States 
of America, No. 200,000, dated the 4th day of July, 
i8g2, until the expiration of said patent, within and 
throughout the territory described as follows — and in 
no other place — to wit : The State cf Connecticut. Said 
condition is that said licensee shall not part with any 
article made under this license without having afHxed 
thereto the word " Patented " with the date of said 
patent and the words '• Licensed for use only in " with 
a specific mention of the territory covered by this 
license, (except that if it be impracticable to make such 
affixes directly to the article they may be upon a box, 
package, or wrapper containing the article :) and if said 
licensee fails to comply in full with the above pro- 
vision, or if said licensee , after due information, parts 
with such a patented article to a person or party who 
has once carried or permitted to be carried, such a pat- 
ented article outside the territory covered by this li- 
cense, said licensee shall thereby forfeit this license, 
and all right under it to said licenser and to the heirs, 
successors, and assigns of said licenser . Said licenser , 
acting also for the heirs, successors, executors, and 
administrators of said licenser , covenants with said 



SALE OF PATENTS. 57 

licensee that the interest and property hereby con- 
veyed are free from all prior assignment, grant, mort- 
gage, license, and every other incumbrance. 

Dated February ist, iS<pj. 

John J. Doe. 
Witness : 

William W. Smith, 

Charles S. Jones. 



EXCLUSIVE ROYALTY-LICENSE UNDER 
LETTERS-PATENT. 

BE IT KNOWN that ][ohn /. Doe of Hartford, 
Connecticut, for the consideration that the licensee 
hereinafter named will perform all the obligations here- 
in put upon said licensee, hereby conveys to Richard J. 
Roe of New Haven, Connecticut, the exclusive license to 
exercise all the rights of practicing, making, using, and 
selling the improvement in Plows secured by letters- 
patent of the United States of America No. 200,000, 
granted to Henry H. Robinson and dated the 4th day 
oi July, 189^, until the expiration of said patent, sub- 
ject to the conditions hereinafter stated, to wit : I. 
Said licensee shall mark all articles made under this 
license with the word " Patented " and the date of 
said patent. II. Said licensee shall continually put 
forth the best reasonable exertions to create and main- 
tain as large a trade as is practicable in articles patent- 
ed in and by said patent, and after the expiration of six 
months from and after the date of this instrument, shall 
pay the royalty hereinafter prescribed on at least One 
Hundred oi said articles for each calendar month. III. 
Said licensee shall pay to said licenser, and to the heirs, 



50 SUGGESTIONS ON THE 

successors, and assigns of said licenser, a royalty of 
fifty cents upon each article patented in and by said 
patent, made and sold by said licensee ; on the first 
secular day of each January, April, July, and October, 
occurring hereafter, said licensee shall render to said 
licenser a written account of all articles patented in and 
by said patent, made and sold by said licensee within 
the thiee calendar months then last past ; within fifteen 
days from and after the date when such a written ac- 
count is due, said licensee shall pay to said licenser the 
royalties due upon such patented articles made and sold 
by said licensee within the three calendar months then 
last past ; and on demand by said licenser said licensee 
shall exhibit to said licenser the detailed items, charges, 
and memoranda on which any such quarterly account is 
based. IV. If said licensee does not perform each and 
all of the obligations herein put upon said licensee, 
then said licenser may terminate this license, but such 
termination shall not release said licensee from any lia- 
bility due at such time to said licenser. V. Said licen- 
see is and shall be, forever, estopped from denying the 
validity of said patent in whole or in part. In consid- 
eration of this license said licensee covenants, promises, 
and agrees to and with said licenser, and with the heirs, 
successors and assigns of said licenser, to perform, keep, 
and abide by all the conditions and obligations put upon 
said licensee in this instrument. 

Dated February ist^ iSgj. John J. Doe. 

Witness : 

William W. Smith, 

Charles S. Jones. 



SALE OF PATENTS. 59 

MORTGAGE OF PATENT. 

BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Thousand dol- 
Ia7-s, receipt whereof is hereby acknowledged, hereby 
?iss,\gx\s io Richard J. Roe of New Haven, Connecticut 
interest as follows in the invention in Plows patented to 
Henry H. Robinson, in and by letters-patent of the 
United States of America, No. 200,000, dated the 4ih 
day of July,i8g2, with the same interest in said patent, 
and in all rights secured by said patent, — said interest 
in said invention and in said patent being the entire 
interest therein. Said assignor acting also for the heirs, 
executors and administrators of said assignee covenants 
with the said assignee and with the heirs, successors, and 
assign? of said assignee, that the interest and property 
hereby conveyed are free from all prior assignment, 
grant, mortgage, license and every other incumbrance. 

The condition of this assignment and mortgage is 
such that whereas said assignor is justly indebted to 
said assignee in the sum of One Thousand Dollars upon 
a promisory note of even date herewith, payable to the 
order of said mortgagee, one year after date with legal 
interest ; now if said note shall be well and truly paid 
according to its tenor, then this assignment shall be 
null and void but otherwise it shall be of full force and 
effect. Said assignor, acting, also for the heirs, execu- 
tors and administrators of said assignor, covenants and 
agrees to and with said assignee, and, with the heirs, 
successors and assigns of said assignee, that if this 
mortgage shall become subject to foreclosure, it may be 
foreclosed in the courts of the state of Connecticut what- 
ever may then be the legal residence of said assignor or 



6o SUGGESTIONS ON THE 

of the legal representatives of said assignor ; and that 
if said assignor, or the legal representatives of said as- 
signor cannot then be easily and readily found in said 
Hartford for the personal service of papers or process 
pertaining to such foreclosure then and thereupon suf- 
ficient service of all such papers and process may be 
made by registered letter or letters deposited in the post- 
office at said A^ew Haven and directed to said assignor, 
or the legal representatives of said assignor, at said 
Hartford^ said assignor hereby vv'aiving all right to oth- 
er service of all such papers and process and agreeing 
that said service by registered letter stand as a full, 
sufficient and legal service. 

Dated at said Hartford the first day of February^ 
A, D., iSgj. 

John J. Doe. [seal] 
Witness : 

William W. Smithy 

Charles S. Jones. 
State of Connecticut ) 
County of Hartford, \ 

At Hartford, in said county and state, personally ap- 
peared the said John J. Doe on \\\t first day of Febru- 
ary^ A. D., i8gj, and acknowledged that he executed 
the foregoing assignment and mortgage as and for his 

free act and deed. 

Before me 
[notarial seal] John S. Johnson. 

(This form answers for the state of Connecticut. It 
might not answer for every state but it illustrates points 
which are essential in every state. First, select the 
state in M^hich foreclosure is to be had, if the mortgage 
is foreclosed, which would naturally be the state in 
which the mortgagor resides when he makes the mort- 
gage. Then comply with all the formalities of chattel 
mortgages in such state ) 



SALE OF PATENTS. 6l 

SHOP RIGHT LICENSE. 

BE IT KNOWN that John J. Doe of Hartford, 
Connecticut, for the consideration of One Hundred Dol- 
lars, receipt whereof is hereby acknowledged, hereby 
conveys a license (non-transferable) — subject to the 
conditions hereinafter expressed — to Richard J. Roe of 
Ne%v Haven, Connecticut^ to practice, make, use and 
vend the improvement in Plows patented to Henry H. 
Robinson^ in and by letters-patent of the United States 
of America, No. 200,000 dated the 4th day of Jttly, 
A. Z?., J8g2, until the expiration of said patent at a 
single factory in said New Haven and in no other place. 
This license is given upon the condition that if said 
licensee shall make any use of said improvement except 
within the terms of this license, then and thereupon and 
thereby this license and all rights under it shall beccme 
forfeited to said licenser and to the heirs, successors, 
executors, administrators and assigns of said licenser. 
Said licenser acting also for the heirs, successors, ex- 
ecutors, administrators and. assigns of said licenser, 
covenants with said licensee that the interest and prop- 
erty hereby conveyed are free from all prior assignment, 
grant, mortgage, license and every other incumbrance. 

Dated February ist^ iSgj. 

John J. Doe. 
Witness : 

William W. Smith, 

Charles S. Jones. 

(A limitation to a specific factory in which the li- 
cense must be enjoyed can be had by inserting im- 
mediately after the word " factory " such words as " at 
No. 1000 Water Street." A limitation as to the num- 



62 SUGGESTIONS ON THE 

ber of the improvements made use of can be had by in- 
serting immediately after the word " vend " such words 
as " to the number of one thousand plows in each cal- 
endar year." 

The license can be made transferable by omitting 
** (non-transferable) " and inserting " and the assignors 
of said Roe " immediately after the words " New Ha- 
ven, Connecticut.") 



INDEX. 



PART I. 



Brokers, Patent 

Commercial Points 

Demonstrate and Develope Before Selling, 

Employer and Employee, 

Joint-Stock Corporations, . 

Only Meritorious Inventions Sell, 

Personal Application to the Trade, 

Rarely Sells Itself, A Patent 

Reaching the Trade by Correspondence, 

Speculative Purchasers, 

Traveling Salesmen of Patents, . 

PART II. 

Assignment, An 

Conveyancing Statute, .... 

Grant, A 

License, A 

Legal Points, 

Mortgage of Patent, A . . . 
Recording, 



Pag e 
. 5 



. 3 
. 6 
. 13 
. 26 
. 4 
. 18 
. 3 
. 20 
. 15 
. 29 



35 
34 
38 
39 
34 



39 
41 



Index. 




Royalty Contract, 


. 46 


State Restrictive Laws, 


. . 46 


Territorial Interests in Patents, . 


. 44 


Undivided Interests in Patents, . 


. 43 


Warranty, . . . . . 


. 43 



PART III. 
Assignment. Entire Interest, before issue. . 
Assignment. Undivided Interest, before issue, 
Assignment. Entire Interest, after issue, 
Assignment. Undivided Interest, after issue. 
Assignment. After Issue, in general, . 

Forms, 

Grant, 

License. Exclusive Royalty, 
License. Exclusive Territorial, . 
License. Sliop-right, ..... 
Mortgage of Patent, 



49 
50 
53 
53 
54 
49 
54 
59 
56 
61 
59 



Je74 



